Currency News

Report: Iraq oil potential high

Oil production in Iraq could double to 4 million barrels a day if violence ends and facilities are modernized, a Colorado energy consulting company says in a forthcoming report.

Ron Mobed, president and chief operating officer of Douglas County-based IHS Energy, said Tuesday the study is the first detailed overview of Iraq's oil reserves and production potential since the war began.

The report, expected to be released in the next few weeks, used experts in Iraq to develop its field-by-field analysis, Mobed said.

IHS found that Iraq has oil reserves of up to 116 billion barrels, validating previous estimates, Mobed said. It also found there could be up to 100 billion barrels more in the country's Western Desert.

The U.S. Geological Survey has estimated the country's additional reserves at 45 billion barrels.

If companies felt safe sending workers to Iraq and investing money there, Mobed said, the country could again match or exceed production levels it had before the first Persian Gulf war.

The report will not deal with the political problems in Iraq or speculate on when the situation may improve, Mobed said.

"When the time comes for people to feel sufficiently comfortable to make investments there, that's when the clock starts on achieving those production numbers," he said.

According to IHS, most of the 2 million barrels of oil Iraq now produces daily comes from the south because facilities in the north are subject to sabotage attacks.

The map-based report, originally set to be released today, was delayed so new information could be added. Mobed said that wouldn't change production estimates included in an overview released to the public.

The report is being completed as the Iraqi government works on legislation that is expected to allow energy companies to sign contracts to explore the country's untapped oil reserves.

Because of the war, big Western firms still expected to wait five years or more before actually beginning large-scale production.